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CMS: No Deadline for States to Launch Medicaid Expansion

By Jane Norman, CQ HealthBeat Associate Editor

July 13, 2012 -- There's no deadline for a state to tell the federal government whether or not it plans to expand its Medicaid rolls under the health care law, Centers for Medicare and Medicaid Services (CMS) Acting Administrator Marilyn Tavenner wrote state governors late last week.

Tavenner also said a state can receive extra funding to help pay for Medicaid Information Technology and exchange implementation even if it has not yet decided whether it will expand Medicaid eligibility or run a state-based exchange. "And if a state ultimately decides not to do so, it will not have to pay those resources back," Tavenner said in the letter to the chairmen of the National Governors Association (NGA), Republican Governors Association and Democratic Governors Association. The NGA begins a meeting today in Williamsburg, Va.

Administration officials had said on background earlier that there wouldn't be a deadline for states to inform the Department of Health and Human Services of their intentions. But the letter from Tavenner represents the first official statement.

The letter from Tavenner begins to answer some of the many questions that states, the health care industry and policy experts have been raising since the June 28 Supreme Court decision that upheld the health care law (PL 111-148, PL 111-152) but said states could opt out of the Medicaid expansion. Under the law, states will receive federal funding to expand their programs to adults earning under 138 percent of the federal poverty level.

About a half-dozen Republican governors have said they are opposed to the Medicaid expansion, and others have hinted they are considering opting out. Some Democratic governors have not yet stated a position.

Tavenner, in her letter, said that as states study their options, "they will recognize this is a good deal" because the costs of the expansion will be funded 100 percent by the federal government for the first three years, then gradually phased down to a minimum of 90 percent in 2020 and thereafter.

"The hospitals will get paid for what would otherwise be uncompensated care provided to uninsured patients," she added. "Their local economies will benefit and jobs will be created when their hospitals remain viable and their workers remain healthy."

She added: "We hope states will not turn down the resources and flexibility offered in the Affordable Care Act and will put aside old political battles to move forward with implementation."

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